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To: NorCalRepub
Rising wages, rising market prices, and low unemployment don't cause inflation either.

Wages, and general prices can rise as an effect of inflation, but they don't cause inflation. Historical periods of inflation have always been associated with governments spending more money than they take in, usually either due to the cost of war, or heavy social spending, or both.

I believe what's happened this time is central banks have mistaken the market effects of higher energy prices for inflation, so now they are going to raise rates too high and choke off their economies. That's similar to what happened in the 1970's.

17 posted on 06/12/2007 7:09:44 PM PDT by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: Moonman62

..yes of course....I think I’m not expressing myself correctly tonight....long day.....plus money supply etc... but you are right....they are raising rates more out of the fear though I’m not sure energy is the whole deal....China’s inflation rate in May was 3.4% I think on an annual basis which is quite high for them....usually when they see wages or the CPI increase too much they are gonna act reflexively not matter what....though I do still think interest rates are actually low historically so once it normalizes....the market shakes it off.....


19 posted on 06/12/2007 7:23:28 PM PDT by NorCalRepub
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